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Trade and Civilisation in the Indian Ocean:…

Trade and Civilisation in the Indian Ocean: An Economic History from the…

by K. N. Chaudhuri

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This book is divided into two parts, part one, a rough chronology of events, the second a view of the structure of trade. The first half of the book is packed with anecdotes but didn't leave me with a clear view of the chronology of events, but did succeed somewhat in defining the over-arching flow of trade and locating that on the map (of which there are not enough). The second part is much better, still filled with great anecdotes, but this time their thematic organization makes more sense. This half presents a interesting view of the social, economic, technological and environmental structures surrounding trade on the Indian Ocean during these periods. This is insightful commentary, though the conclusion is a bit weird. ( )
  byerbp | Apr 21, 2017 |
A concise history of trade around the Indian Ocean

In another book inspired by Fernand Braudel, K.N. Chaudhuri describes the Indian Ocean as the Mediterranean of Bilad al-Islam (the Land of Islam). Mr. Chaudhuri has looked at the Indian Ocean as a "human" rather than a cartographic space, and has included the Trans Himalayan and T'ien Shan regions. The book starts with the advent of Islam and ends with the rise of European imperialism around 1750. Hence it is marked by the diffusion of Islam as a religion and a way of life as the final break with the classical age, and by the age of Western expansion (of which Spain's Reconquista is an early example). Western expansion delivered a mortal blow to Muslim supremacy as well as to introspectiveness in India and China. The Portuguese were the first power in the Indian Ocean that tried to control the sea lanes, while China and India had undervalued their navy versus the army defending terra firma.

Pre-modern rulers depended upon agricultural surplus and perennially suffered a shortage of ready cash and unending military expenditure. Merchants had to be "persuaded" to fund them by giving them privileges or the threat of violence. Merchants and bankers were indispensable intermediaries in converting agricultural surplus into disposable state income. Merchants also provided the luxury goods every elite wished to possess.

Merchants are generally obliged to travel and the organisation of trade revealed the mental world of the commercial community. Ricardo's theory of relative price efficiency lies at the source of international trade, but does not work for the period covered in this book. The author does not elaborate very clearly why this is the case, but mentions among others cultural differences in the appreciation of products (as if appreciation is not a factor in demand price determination). Overall areas were much more self sufficient economically than they are today.

The Indian Ocean was an area of social and cultural diversity rooted in four different civilisations: the Irano-Arabic, the Hindu, the Indonesian, and the Chinese. Seaborne trade supplemented with Central Asian caravan routes created a strong sense of unity. The political and religious frontiers of Islam ran across trade routes, kingdoms of non-believing princes, and natural boundaries.

Slow, long-term change took place by the advance of coral reefs (which obstructed sea passages and may have led to changing trade patterns) and the retreat of the sea around riverine deltas. Climate had a pervasive influence, creating distinctive agricultural patterns, and monsoon winds defined the sailing seasons.

The T'ang dynasty was founded at roughly the same time as Muhammad's escape to Medina. The T'ang dynasty created a larger zone of Chinese cultural influence and new consumer demands. Trade seems to have contracted in the late Roman era, but the Arab conquests created a new vast area of consumption. The Islamisation of the southern Indianised lands of Southeast Asia followed the wind-system of the Indian Ocean, despite that since the tenth cerntury Arab ships and merchants no longer travelled all the way to China, but stuck to shorter, segmented voyages to reduce transaction costs. Medieval trade was based upon four great products of eastern civilisation: silk, porcelain, sandalwood, and black pepper. They were exchanged for incense, thoroughbred horses, cotton textiles, and metal goods. On ships luxury goods were mixed with low-value bulk goods serving as ballast. Muslim merchants reached China and Indonesia as early as the 8th century, likely earlier than they reached East Africa (Mogadishu, Zanzibar, and Kilwa). The Arabs united the two arteries of trade in antiquity: the Mediterranean and the Indian Ocean. On the Western end both the Red Sea and the Persian Gulf were used, depending on their relative importance across time. Basra became an important town with its Tigris connection to Baghdad. Baghdad became the capital of the caliphate, a city on the Tigris with no "obstacle between us and China", although its surrounding lands offered many products for trade as well.

China during the late T'ang and Sung dynasties attracted large numbers of traders. In 878 the bandit Huang Ch'o slaughtered 120,000 Muslims, Christians, Jews and Iranians in Kwang-chou. Marco Polo and Ibn Battuta reported large trade and harbour cities. Drugs and aromatics reached China via the tribute system. The Ming sent its famous fleets for political and military as much as commercial purposes, although the commercial benefits seem to have been limited.

Despite the plague and the Mongols the 14th and 15th century were unusually prosperous for Indian Ocean trade. The importation of Mediterranean style of trade and warfare was a violation of agreed conventions. It moved trade routes from the Arab lands and Venice to Lisbon and on to Antwerp. First the Portuguese seized the most profitable ports and then they managed to obtain a semi-monopoly on the pepper and spice trade; prices in Alexandria rose to astronomical levels, much to the detriment of Venice. It ended the period of unarmed trade in the Indian Ocean. Organised by the Crown, the Portuguese worked with a plan of ports to occupy, including Goa, Hormuz and Malacca. Muslim trade was eliminated and others had to buy naval passes from the Portuguese. The third phase saw a less successful monopoly (caused among others by Aceh resistance) compensated by very profitable trade between Macao, Nagasaki, and the Philippines. This lasted until the arrival of the Dutch and English. Trade between Macao and Nagasaki was helped by the embargo on trade with Japan with its many pirates. The Portuguese became middle men between Japanese and American silver and China's constant need for the precious metal to facilitate economic growth. Jan Huyghen van Linschoten described Goa as a centre with a daily market in its main street that was quite like Antwerp. It was a free port where the inquisition was only applied to baptised members of the Portuguese empire.

The Dutch closure of the Scheldt (and Antwerp's harbour) also unsettled Portuguese trade. The Dutch and English traders preferred peace and founded chartered companies for trade with the Indian Ocean. These companies had different values than their Iberian predecessors. Their corporate structure, concentrated financial resources and size created a closer link between supplying and demanding markets. Far larger volumes of products became available, demanding the safety of their own enclaves, which in itself caused heavy costs that required (preferably) monopolies (page 88). The Dutch East India Company followed Dutch urban habits of collective decision making through committees and councils with delegated authority (page 83). The two companies soon started to appreciate the logic of Asian trade. They constantly sought for suitable trading settlements and markets. The Dutch managed to wretch some of the major ports from the Portuguese. At this stage the English sometimes sought cooperation with the Portuguese, leading among other to the transfer of Bombay to the English. After the War of the Spanish Succession the English managed to take over the leading role from the Dutch. The English, Dutch and (newcomer) French followed the same principle of selling conduct passes to native traders, combined with naval reprisals against shipping without such passes. Naval power was used as a strategic deterrent against land power like the Moghuls. The cotton textiles from the Coromandel were sold as far as Europe West Africa and the Americas and provided the bulk of the profit for the various companies. Bengal was another profit maker. Amsterdam and London became the leading emporia for a trade that reached as far as the Americas. Spain held the key to the money supply, but the East India companies diffused the money supply together with Levantine merchants.

The land of Islam was touched by the Sea of China and the Sea of Rome. The seafaring communities of the Indian Ocean welcomed Muslims merchants, sailors, and migrants. The building of the Friday mosque and its continued care always authenticated the Islamic presence. In Quilon the Arabs traded directly with Chinese junks and envoys of the emperor visited the town during Ibn Battuta's visit. The cities of the Indian Ocean, ever prospering and declining in long-term cycles, lived a life of active economic exchange and social contacts with people from overseas. The transplantation of newcomers may or may not have been the result of trade, but once effected it strengthened the appreciation of unfamiliar values and material artefacts. The social groups involved in trade varied through time. This applied among others to Hindu merchants who ceased direct voyages to Indonesia in the 16th century and reoriented themselves towards the Red Sea and the Persian Gulf (page 100). The arrival of the Portuguese must have influenced this.

The split of trade between the Middle Eastern, South Asian, and South China Sea was caused by the monsoon system: it takes more than one monsoon to get from the Middle East to Malacca. Other factors like market depth and the availability of the services necessary for trade filled in the details that segregated winning emporia from the losing ones. Malacca used shahbandars to safeguard law and order and perform administrative tasks for each ethnic group. Malacca makes a very smart impression with efficient merchandise clearing and tax procedures as well (page 113), leading to impressive wealth accumulation for the city and the conclusion that

Whoever is lord of Malacca has his hands at the throat of Venice.

Despite opposition from shipbuilding interests India produced various East-Indiamen as well as ships for the Royal Navy. Within Asia there was a broader variety of ship construction, depending on local needs. Overall, there were three ship-building traditions: Indo-Islamic, Indonesian (fast, light boats for inland seas), and massive Chinese junks. It is strange that ship building did not become more uniform, as was the case with European ships.

It is curious that floating populations which constantly crossed cultural frontiers in the course of their routine sea voyages should have remained so distinctive in identity.

Most likely the reasons are lost in history. The quality of workmanship had little to do with it.

In premodern times the production of surpluses greatly influenced the terms of trade. Famines etc. could cause fluctuations in terms and their profitability. It is unclear if the Middle East suffered a permanent trade deficit. It balanced its trade with the East with trade with Europe, Central Asia, and eastern Africa.

International trade as practised around the Indian Ocean requires a quite developed form of capitalism. Trade brought extended legal and economic practices to emporium towns, like spot and forward markets with clear price indicators and continuous supply, local monetary institutions and bankers for credit and the exchange of foreign bills, and consensus among traders or the recourse of courts of law for the settlement of accounts and debt, and a market for shipping space (page 197).

Documentation of trade is lost or obscure in times before double entry bookkeeping. It may also have been purposely opaque. Merchants had a secretive attitude (page 204). Risks were reduced by spreading shipment. This only changes with the arrival with the bureaucratic European trading companies. European sources proof that coastal areas of India, Indonesia, and parts of China had become highly commercialised by the beginning of the 17th century.

Asian traders were kept separate from other groups in society.

The merchants or bankers in these trading nations of Asia could not turn their investments into spheres of public interest protected by law and encouraged by the state. Members of the public who invested their money in the bonds of the republics of Venice or Genoa or the Bank of Amsterdam were not free from financial risk. But the bonds had the qualities of legal recognition and of mortgage value. The Indian or Chinese merchants lending money to the ruling elites or helping with the realisation of taxes were unable to institutionalise their public credits into marketable assets.

In contrast, unlike bureaucrats and landowners, merchants suffered from a perennial erosion of their material status, due to lacking legal protection. Few became rich anyway.

Given the very limited presentation of figures, Mr. Chaudhuri’s book sometimes seems more like a conventional history of trade than a book on economics. Only the last two chapters really deal with economic issues in the stricter sense of the word. The book gives lots of facts, but lacks the narrative (like Jared Diamond's Guns, Germs, and Steel), and size (228 pages without notes) to make it easy to read. It also spends little attention to the trade routes as a conduit for ideas and religion (particularly Islam). However it does make a very good combination with for example When Asia Ruled the World. ( )
1 vote mercure | Jun 6, 2011 |
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Amazon.com Product Description (ISBN 0521285429, Paperback)

Before the age of Industrial Revolution, the great Asian civilisations - whether located in the Middle East, India, South-East Asia, or the Far East - constituted areas not only of high culture but also of advanced economic development. They were the First World of human societies. This 1985 book examines one of the driving forces of that historical period: the long chain of oceanic trade which stretched from the South China Sea to the eastern Mediterranean. It also looks at the natural complement of the seaborne commerce, its counterpart in the caravan trade. Its main achievement is to show how socially determined demand derived from cultural habits and interpretations operated through the medium of market forces and relative prices. It points out the unique and limiting features of Asian commercial capitalism, and shows how the contribution of Asian merchants was valued universally, in reality if not legally and formally. Professor Chaudhuri's book, based on more than twenty years' research and reflection on pre-modern trade and civilisations, was a landmark in the analysis and interpretation of Asia's historical position and development.

(retrieved from Amazon Thu, 12 Mar 2015 18:24:33 -0400)

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